Jose Mourinho's search for a top-class centre-forward has been narrowed down and he is ready to take the plunge on the Spain international.
Chelsea will watch him again on Wednesday evening in action for Atletico Madrid during their La Liga clash against Granada as their interest in the forward steps up.
Costa, 25, has an eye-catching goalscoring record in Spain and has helped Atletico reach the Champions League quarter-final against Barcelona.
Negotiations will be complex and delicate because Atletico want to complete the permanent signing of keeper Thibaut Courtois, who is on loan from Stamford Bridge.
Courtois is part of the succession planning at Chelsea for Petr Cech and Mourinho is unlikely to sanction his sale.
Although an emotional return to Atletico could appeal to Fernando Torres, the Spanish side prefer to sign young players with huge sell-on fees.
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